International Trade in Poland

News Related to International Trade in Poland

Business outline for Poland

Main Industry Sectors

In Poland, agriculture employs less than 20% of the active population and contributes to about 5% of the GDP. The country is generally self-sufficient as far as food is concerned. The main crops are rye, potatoes, beetroot, wheat and dairy products. The country also breeds pigs and sheep as livestock farming. Poland is relatively rich in natural resources and the main minerals produced are coal, sulfur, copper, lead and zinc. 

The manufacturing industry is the economy driver, contributing to about 30% of the GDP, whereas the tertiary sector represents about 65% of the GDP. The country's main industrial sectors are machine manufacturing, telecommunications, environment, transport, construction, industrial food processing and information technologies. The automobile industry has resisted well the effects of the economic crisis because this sector was placed at the niche at the right time when there was a high demand for small economic vehicles, which was exactly what Poland was producing.

Economic Overview

As a member of the European Union since 2004, Poland 's economic situation was strengthened with its integration into the community.  The growth of the GDP, which was solid between 2006 and 2008, was affected by the international economic crisis, but Poland was the only European country that experienced a positive growth in 2009.  The growth of the GDP rose to 3.4% in 2010 and it should be stronger in 2011, supported by the domestic demand and investments, a typical characteristic of the economies that are on the catching-up stage. 

The slowdown of the economy and some fiscal measures have intensified the deficit.  The government has adopted a consolidating plan for public finance.  The objective is to reduce the public deficit from 7% in 2010 to 3% in 2013 and to keep the public debt under 55% of the GDP.  The plan anticipates, among many issues, an increase of VAT and  the privatization and reduction of manpower in the public administration. 

The unemployment rate, which had been on a steady decrease since 2004, has risen during the crisis and it has reached 9.8% in 2010.

FDI in Figures

The flows of foreign direct investment in Poland slowed down after the global recession, but their dynamism was met again in 2010.  Poland figures among the most attractive countries in Europe in terms of FDI.  The real estate sector represents more than 40% of the total FDI, due to the fact that besides the existing real estate trade, the industry and services fields have also a large real estate component .  The main assets of Poland are: its strategic position, its large population, its membership to the European Union, its economic stability and its fiscal system which is attractive to the companies.

FDI Government Measures

- Investment assistance in special economic zones (SEZ);
- Entrepreneur access to European Union structural funds;
- Creation of industrial and technological zones that enable a synergy of companies working in the same sector;
- low costs of labor.

In order to face the economic crisis and support long term foreign investments, the Polish government has formulated a stabilization and development plan for the years 2009 and 2010 of Euro 24 billion, particularly to grant credit to small and medium companies and invest in renewable energy sources.

Country Strong Points

A fast-growing economy, location in central Europe, a multilingual work force and cheap labor costs make Poland an internationally attractive country. Poland also enjoys a well managed healthy economy, which is withstanding the crisis better than other European countries. Unlike other Central European countries, its population did not have to resort to loans in foreign currencies, in particular Swiss, a fact which protects the population from maximum debt.

Country Weak Points

Slow administrative procedures (according to the World Bank it takes 31days to form a company) and a deficit in the current account are the negative points linked to the Polish economy. The adoption of the Euro, initially planned for 2012 is compromised by the financial crisis and thus delaying the benefits to the economy.

Foreign Trade Overview

Poland is an open country to foreign investment.  During the 2007-2009 period, trade represented more than 80% of the GDP.  The geographical location of Poland gives it a strategic importance. As a fact, Poland is situated half-way between Paris and Moscow and between Stockholm and Budapest, and it has important ports which are connected to the North Sea through the Baltic Sea.  In addition, the country constitutes an excellent place for the export of merchandise to the former Soviet republics. 

Since Poland became a member of the European Union, its exports have increased more than 30%, in particular towards Russia (more than 75%).  After having experienced a strong decline on its trade balance during the crisis, the country has shown a very slight deficit on its trade balance in 2010, a trend that should continue during the next following years. 

The three main trade partners of the country are the European Union, Russia and China.